The State Bank of Pakistan (SBP) has spelled out various incentives for small exporters, providing refinancing facility to Small and Medium Enterprises (SMEs) under the Export Finance Scheme.The SBP move is aimed at to fulfill the financing needs of exporters and to promote the exports of the country. The SBP took this decision after noting that most of the banks are not providing sufficient funds to SMEs under the Export Finance Scheme (EFS). In order to further improve utilisation of the EFS for SMEs, the SBP has given additional incentives for banks and exporters. An SBP circular issued in the regard says the banks’ spread in EFS mark-up rate is being enhanced from 1 percent to 2 percent for SME borrowers only. “Therefore, the banks can charge spread of 2 percent (currently 1 percent) under the scheme against lending to SMEs from the date of issuance of this circular without changing prevailing end user rate,” says the SBP, adding that the SBP refinance rate will be adjusted accordingly.
The circular also adds that the performance based mark-up rebate under EFS Part-II has been linked with export performance and that theexporters can avail mark-up rate rebate ranging from 0.5 – 1.5 percentage points depending on the level of export performance achieved. The bank says that incentives of mark-up rebate have been increased for SMEs by 0.5 percentage point as compared to corporate exporters to encourage SMEs to enhance their exports.“The performance based mark-up rate rebate will be allowed to high performers of SME borrowers against achievement of high export performance during Financial Year 2013-14 and onward,” it says.
The banks can extend financing to corporate exporters upto a maximum of 90 percent of the limit to be sanctioned by the SBP for each financial year. However, new limits of banks will be adjusted in a way that existing utilisation of corporate borrowers is not reduced. A reasonable transition period is allowed to the banks to adjust their limits against corporate client. SBP BSC Offices will start implementation of this new mechanism with effect from July 1, 2015, says the circular.
It is noted that despite the SBP incentives, the most enduring factor in Pakistani society is the lack of awareness about everything around us from trade to investment opportunities, from health issues to government rules and regulations and from educational know how to official mechanism. Everyone in the country — no matter highly educated or uneducated, skilled or unskilled — leads most of the lifetimein dark. Luckily the educated people have now an edge over the illiterate class in a sense that they can get knowledge about anything from the cyber world.
It will be highly appreciated if the government put the incentives given by it explicitly in local languages
